Ten odd years since Bitcoin, the most famous cryptocurrency started in 2009, Indians own 60% of the world’s cryptocurrencies through 15 million people.
The cryptocurrency is the Guy Fawkes sovereign legal tender. This 21st century avatar is the disruptive offshoot of the digital age, now using the third stage of internet efficiency and proliferation, dubbed Web3. It offers a global currency that has thousands of names. But none of them have underlying assets like national currencies. Their value is also not guaranteed. His calculation comes from a frenzy of investing speculation and time in the lands of cyberspace to transact with conventional currency.
This virtual Guy Fawkes used the pseudonym Satoshi Nakamoto for his alleged inventor. He doesn’t want to blow up the King and the House of Lords. It just wants to operate as is, anonymously, without regulation, across the digital universe. An autonomous train without a central bank at its peak.
Ten odd years since Bitcoin, the best-known cryptocurrency started in 2009, Indians own 60% of the world’s cryptocurrencies through 15 million people, trading, investing, or building blocks for the chain in a process named mining.
Major cryptocurrency exchanges such as WazirX, CoinDCX, Giottus, Zebpay and Bitbns are here in partnership with Punjab National Bank, IDFC First Bank, Federal Bank, Deutsche Bank, Bank of India, Bank of Maharashtra, Indian Bank. This batch recorded transaction volumes of $ 977.67 million in the spot market on November 24, 2021. Bigger banks such as SBI, HDFC and ICICI Bank have stayed on the sidelines so far.
Foreign companies such as Tiger Global, Sequioa Capital, b Capital, Andreessen Horowitz, Paradigm, Ribbit Capital, injected $ 500 million into Indian cryptocurrency and blockchain technology in 2021. This brought India’s valuation to 1 , $ 9 billion, against $ 500 million in the six months since.
It’s not just speculation. Tata Steel has fulfilled a paperless export order compatible with the Standard Chartered Bank / Contour blockchain to a metals company in Bangladesh. This follows an HSBC platform enabled trade finance transaction with a United Arab Emirates-based company in April 2021. These fraud-proof, confidential and secure blockchain transactions could be completed in hours. instead of several days, avoiding a pile of paperwork. Blockchain technology offers a collective of users who perform their own control and custody functions.
But all is not well in paradise. The valuations of the roughly 6,000 bizarre cryptocurrencies in operation are volatile and do not operate with safety nets of any kind. The biggest are Bitcoin, Ethereum, Tether, Solana, Cardano, Polkadot, Avalanche. A New York-based website, CoinDesk, provides information on cryptocurrencies. Bitcoin’s valuation at its all-time high was $ 69,000 earlier in November. It was $ 55,460.96 on November 24, 2021.
There is an effort to market cryptocurrencies as a get-rich-quick scheme for gullible investors. It could be tantamount to biting the government in the absence of regulation.
However, the announcement of future Indian government legislation during the winter session of Parliament also caused panic to fall in value by 20%. A similar knee-jerk reaction followed comments made by the RBI governor in April 2021.
It’s a computer-generated phenomenon, using a book-building process he calls “mining.” It is a peer-to-peer payment system and operates internationally without exchange rate arbitrage. Bitcoin is used to purchase goods and services from networked online stores, turns into cash at designated Bitcoin ATMs, and can even complete transactions at some physical establishments. Many people use it as an investment to speculate on its ups and downs. Bitcoin balances are kept in encrypted online ledgers. He descends from cyberspace to cash his tokens for hard currency, or in exchange for goods and services.
Truth be told, no government can really stop it, as they all become more and more dependent on the digital world. He has created his own crypto platform on a multitude of computers. Like an amoeba, it can break off, multiply, and reform into fresh clusters, if threatened. Countries are worried about its runaway potential to be used for “illegal transactions” even as they grapple with ways to put a saddle and a bridle on it. But a clumsy approach could put it out of the reach of the encrypted Dark Web.
If you can’t beat him, you might have to join him. This appears to be what India is proposing to do, with the issuance of its own RBI issued cryptocurrency. Some already call it Bharatcoin. It will likely attack the platforms of Bitcoin users and “private sector” friends. This will give it a big slice of the cryptocurrency pie, infiltrate this anonymous universe to better understand how it works, and have the opportunity to make further advances.
Trying to invent his own international delivery system will kill him dead in the water, especially if other governments decide to go ahead as well. In addition, Niti Aayog already offers “full stack digital banks” to put an end to fully managed physical branches on the Web3 Internet. He cites UPI’s success with over Rs 4 lakh crore in transaction value, while Aadhar-based authentications hit 55 crore.
Prescient El Salvador, the first country to do so, has accepted Bitcoin, the first and most famous cryptocurrency, as legal tender as of June 2021. It works with regular money for purchases and payments. Cuba and Ukraine are also in the process.
The United States, primarily for the purpose of mining it for tax purposes, classified it not as a currency but as a “money services business” (MSB). It already operates legitimately in the American “Derivatives” market. The American Internal Revenue Service (IRS), or tax branch, classifies Bitcoin as “property.” And where the United States is going, most of the free world must follow.
Canada calls Bitcoin a “commodity”. Australia classifies it as an “asset”. The EU also allows its use and has exempted it from value added tax (VAT). Britain has made Bitcoin subject to certain tax regulations. Germany is considered the crypto capital of Europe. Many of its stores have been accepting Bitcoin for several years now. Recently, Germany passed a law allowing special funds to allocate 20% of their capital to crypto assets. India is on the verge of trying to regulate them, with a view to taxing them as assets, putting in protective measures to protect the unwary, and perhaps trying to popularize the sarkari offer by banning private cryptocurrencies.
Interestingly, China and Russia, great totalitarian systems, have banned cryptocurrencies. It remains to be seen how they will enforce such an offshore ban. Minnows like Vietnam, Bolivia, Colombia and Ecuador have also turned their backs on Bitcoin.
Bitcoin is the potential darling of black money, a digital hawala on the brink of global legitimacy. It can be used anonymously by intelligence agencies, evangelists, angel investors, international NGOs, tax evaders, criminals, drug cartels, terrorists, and anyone willing to take risks for a possible profit. Like the Internet, it is a liberating agent. There is no guarantee that Indians will use “Bharatcoin” when they want to do something bad or illegal. The only way to regulate it is to follow suspicious digital leads and get the money back when it lands in the conventional monetary universe.
It seems many moons ago Ajit Panja, then Minister of Information and Broadcasting (I&B), responded to an ignorant clamor in parliament that wanted satellite television to be banned. Pernicious content, said opponents. It would spoil the morals of our children and young people. And this when there was only Star TV available in addition to DD. There was no Internet beyond the slow “dial-up connection” in rare clusters. Panja, in turn, said it couldn’t be done. This country was served by a satellite in space that had a giant “footprint” stretching from Singapore to the Persian Gulf, with India in between. It was a far cry from the technology used by terrestrial television. Anyone could make a satellite dish in a roadside workshop in case the government was tempted to ban their manufacture. Now in the age of OTT and streaming, and yes, Web3, this Panja story seems unreal.
In Afghanistan, then also under Mullah Omar’s Taliban, people were making satellite dishes to access prohibited pornography. You were hanged if you got caught, but that didn’t deter people.
Cryptocurrency is here to stay. He has already dropped the concept of sovereignty by a few points and will only advance his game in the future. The blockchain works. Mining too. We may be moving towards a global currency. All we can do is join the fray and try to fight on the free market in the meantime.